Is the Man in the Arena stupid? (after reading two essays)

A senior manager at work recommended The Basic Laws of Human Stupidity by Carlo Cipolla (economic historian at Berkley). Anyone familiar with a certain type of office already knows the punchline: the higher the position, the more likely the book is misconstrued as an instruction manual. Cipolla’s essay is amusing and there is some benefit in reflecting on his definitions, though, as these notes will indicate, they may not sustain a long train of thought.

The essay was originally published privately and distributed among friends in 1976 and so was likely not intended to bear too much scrutiny. As such, Nassim Nicholas Taleb’s foreward does it a disservice by insisting the laws are rigorously obtained and that the book is not a joke. Having read Taleb’s jabs at economists before, I found the forward tiresome and would recommend skipping it, but I also know I am very much not Taleb’s intended audience. What does interest me is how three intelligent (in the colloquial sense, not Cipolla’s definition) people come away with such contradictory views from a work that has, as described by the forward, “…a formal axiomatic definition of what stupid means…”.

Taleb’s foreward is the easiest case to deal with: he is simply misinforming the reader. The laws of stupidity are not “rigorously obtained” within the text, and doing so would have spoiled the fun. (It is, of course, possible that Taleb is referring to Cipolla’s research prior to the essay but I am unclear how he would know some 45 years after the original publication, and Cipolla died in 2000 and so cannot settle the matter.) Considering the difference with a manager is more illustrative and considerably more fraught given that the categories the essay defines are: intelligence, stupidity, helplessness, and banditry, three of which might be considered career limiting terms when applied to individuals in more senior positions.

Cipolla’s definitions come from plotting points along two axes: private benefit (as experienced by whoever is taking the action), and the benefits to those who are acted upon (as experienced by the person on the receiving end). Those who produce a benefit to themselves and others are classified as intelligent, those who accrue benefits to themselves while causing losses for others are bandits, and those who benefit others at a loss to themselves are helpless. A stupid person is defined as one “…who causes losses to another person or group of persons while himself deriving no gain and even possibly incurring losses.” The other laws focus on the distribution and danger posed by stupid people, and the essay concludes with a macro analysis about how societies flourish or decline dependent on how well they manage the historically invariant proportion of stupid people.

The essay is fun, but fun does not mean there is not a point to be made. Defining stupidity allows the reader to classify friends and colleagues (and, indeed, are encouraged to do so with charts in the back) as well as reflect on the more serious arguments Cipolla makes about the dangers of stupidity and its ability to halt progress. The difficulty is that while stupidity may be clearly defined, benefit is not, and so the reader is given considerable latitude in terms of what they define as stupid.

At the workplace, the individual who recommended the work was given a clear harm resulting from a proposed change. This harm was acknowledged, but ultimately dismissed in the name of some kind of progress. By the essay’s definitions, this individual must be defined as stupid or a bandit. The manager almost certainly does not think of themselves as either, though, if forced, would likely opt for bandit. Readers familiar with this sort of workplace know the proposed benefits never materialize and may propose an alternative definition. Cipolla is clear in chapter 3 that the benefits are measured from the perspective of the individuals or groups along their respective axes (that is, the person taking the action measures their gains or lack thereof, and the benefits of the individual or group affected are measured by the perspective of those affected). There is a famous road paved with good intentions, and so Cipolla may be right not to include intentions or expectations in the calculation, but, beyond the lack of specificity in defining benefit, the focus on outcome is the other hurdle that prevents the essay from inspiring more reflection than it should.

This brings me to the question posed in the title of these notes: is Roosevelt’s Man in the Arena stupid? Shortly before accepting his Nobel prize, Theodore Roosevelt gave a speech at the University of Paris titled “Citizenship in a Republic”, better known as the “The Man in the Arena” speech due to the following passage:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.

Theodore Roosevelt, Citizenship in a Republic

While comforting to those stinging from a failed venture, and much needed sentiments at a time when snark has become a substitute for doing anything interesting, it is also worth noting that Richard Nixon (who referenced the quote directly in his resignation address) and Ed Wood may be counted as men in the arena. Cipolla’s final law is that the stupid person is the most dangerous person, while reading the rest of the speech will clearly show Roosevelt considers the characteristics of the bandit to be fatal to a republic. When focusing on outcomes, it is inevitable that some of the men in the arena must be stupid men. Not every enterprise is successful, yielding no benefit to the individual, and denying society the resources that would have otherwise been put to more productive use. As with the workplace example, there may be some dancing around the definition of benefit, but clearly some failures when measured by outcome will be pure cost and no benefit. Both Cipolla and Roosevelt present their cases in a macro context, highlighting the conditions under which a society thrives or declines, but one is far more accepting of failure than another.

This puts me in mind of another essay I read the same day: “Innovation Starvation” by Neal Stephenson (originally for the World Policy Institute, but I found it his collection of short works Some Remarks). Stephenson addresses the fact that we are less capable of getting “important things done” than we were previously. Stephenson is hardly alone in this estimation, as the relative stagnation of productivity despite technological progress is something of an open question in economics (Robert Gordon’s The Rise and Fall of American Growth: The US Standard of Living Since the Civil War offers a readable perspective on this), and many of the counterexamples appear to be retreading achievements from the time Stephenson identifies as being innovative (an observation he makes directly in the essay). At the risk of oversimplifying, the culprit for Stephenson is an unwillingness to take on risk.

There is certainly no shortage of lip service paid to risk takers, but any survey of managers for projects that were bold undertakings but ultimately failures will inevitably come up short, either due to the risk tolerant managers being replaced or, more likely, due to the existing managers’ own sense of self-preservation. In an earlier essay, “Locked In” (printed as “Space Stasis” in Slate) Stephenson gave examples of better alternatives to (or improvements on) rockets that simply cannot be attempted due to the inability to get launch insurance on even a technically perfect alternative due to the absence of a track record. Mathematically, we are ignoring a global maximum in the pursuit of a local maximum, but Stephenson uses the better analogy of being unwilling to go into a valley to reach a higher hill.

Stephenson’s arguments may seem a bit dated (the essays are 10 years old) given how failure seems to be almost totemic in Silicon Valley and, indeed, venture capital, best personified through Y Combinator, is largely predicated on a handful of outsized successes compensating for a majority of failures. While this is a greater willingness to fail than may be found in established firms, this is something of an actuarial approach to financing, and it will prioritize a certain kind of project. Important undertakings that do not offer an exceptional return (the “unicorns” and now “decacorns”) are simply not considered. For instance, treating orphan diseases is undoubtedly important, but, by definition, will not attract the attention of venture capital (and when rare diseases do attract investor attention, the results are not always to the public’s liking). This view of failure is likely closer to Roosevelt’s than Cipolla’s, but it is difficult to see it as an antidote to the greater issue of Innovation Stagnation highlighted in Stephenson’s article.

Cipolla’s essay is fun and provocative, but its pleasures wear off the longer one reflects on its arguments. Defining something is a great way to examine it, and so the “The Basic Laws of Human Stupidity” is useful in this regard, even if it is a ladder we kick away once climbing. The ultimate limitation is that, in so far as one can define benefits, the focus on outcomes is too limiting and is likely a cause for stagnation (if not outright decline) rather than an antidote. Stephenson seems closer to the mark, even if it seems like we’re more willing to toast to the crazy ones than we actually are.

Roosevelt’s speech concerned many more qualities than going into the arena. The rest of speech isn’t quoted as much as the arena part. Some of the views expressed are certainly untimely and not only due to some kind of lack of public spiritedness. Even so, there are still virtues that can be extracted from the speech that do speak to the flourishing of society. Patents serve an important role in ensuring a continuing supply of pharmaceutical innovation, but Alexander Fleming did not pursue the financial rewards from discovering penicillin and was incensed upon hearing of American patents on penicillin production. The speech contains admiration for the profit motive, but does not assign it any higher priority than any of the other virtues. Basic research is foundational to the kinds of innovations that ultimately produce the kinds of products venture capitalists seek to finance, but do not necessarily generate any significant returns themselves. As with most problems, this kind of problem is complicated and so does not lend itself to a sound byte solution (another hazard cautioned against in Citizenship in a Republic).

As amusing as it is to read, it’s hard to see the republication of “The Basic Laws of Human Stupidity” and its bestseller status 45 years after its initial publication as a particularly encouraging sign that we’re looking for the right solutions. Certainly the person who recommended it to me would not like to have Cipolla’s lens pointed towards them (and I have no intention of clarifying things for them). But it does mark the essay as one likely to be more appealing to the “cold and timid souls who neither know victory nor defeat”. It’s always easier to call other people stupid, and to provide definitions broad enough to flatter the audience. This is not entirely Cipolla’s fault and likely not his intent, but then, by his standard, the outcome is what matters. Both Cipolla and Roosevelt seem to be in agreement that the society will flourish or decline based on the actions of the total population, but the relative popularity of each perspective reminds us of something we already know: there are always more people outside the arena than in it.

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